Mini Case GM vs. Toyota common-size income statement and common-size balance sheet Answer

Mini Case GM vs. Toyota common-size income statement and common-size balance sheet Answer

Mini Case GM vs. Toyota

A. Common-sized income statement

Toyota
Common-Sized Income Statement 2008 2009
Sales $262,394 100.0% $172,749 100.0%
Cost of goods sold 199,912 73.5% 129,100 74.7%
Gross profit 62,482 26.5% 43,649 25.3%
Selling, general, and administrative expenses
24,938
9.5%
25,804
12.3%
1%

General Motors
Common-Sized Income Statement 2007 2008
Sales $179,984 100.0% $148,979 100.0%
Cost of goods sold 160,856 89.4% 149,311 100.2%
Gross profit 19,128 10.6% 149.311 –0.2%
Selling, general, and administrative expenses
14,412
8.0%
149,311
9.9%
Depreciation and amortization 9,513 5.3% 9,931 6.7%
Operating profit (4,797) –2.7% (25,064) –16.8%
Interest expense 3,307 1.8% 3,055 2.1%

Net income (38,732) –21.5% (30,860) –20.7%

Toyota
Common-Sized Balance Sheet 2008 2009
Assets:
Cash & Equivalents $23,012 7.1% $30,386 10.3%
173,633 53.6% 175,027 59.2%
Accumulated depreciation (95,661) –29.5% (99,677) –33.7%
Net plant, property & equipment 77,972 24.1% 75,350 25.5%
Investments – 0.0% – 0.0%
Intangibles – 0.0% – 0.0%
Other assets 125,363 38.7% 105,482 35.7%
Total assets $323,968 100.0% $295,857 100.0%

Liabilities:
Accounts payable $22,086 6.8% $13,229 4.5%

Paid-in capital 4,966 1.5% 5,102 1.7%
Retained earnings 121,443 37.5% 106,117 35.9%
Less: Treasury stock (11,902) –3.7% (12,836) –4.3%
Common equity 118,470 36.6% 102,425 34.6%
Total liabilities and equity $323,968 100.0% $295,857 100.0%

General Motors
Common-Sized Balance Sheet 2008 2009
Assets:

Other assets 38,751 26.0% 7,846 8.6%
Total assets $148,883 100.0% $91,047 100.0%

Liabilities:
Accounts payable $29,439 19.8% $22,236 24.4%
Notes payable 6,047 4.1% 15,754 17.3%
Accrued expenses 34,024 22.9% 35,921 39.5%
Short-term notes — 0.0% 0 0.0%

Paid-in capital 15,319 10.3% 15,755 17.3%
Retained earnings (53,356) –35.8% (102,926) –113.0%
Common equity (37,094) –24.9% (86,154) –94.6%
Total liabilities and equity $148,883 100.0% $91,0447 100.0%

1. Prepare a common-size income statement and common-size balance sheet for each firm for both years.
2. How much profit (loss) was each company making per dollar of sales?
a. To what would you attribute any differences?
3. What difference do you notice in the common-sized balance sheets that could account for the problems of GM relative to Toyota?

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Mini Case GM vs. Toyota common-size income statement and common-size balance sheet Answer